Making the Best 'Right' Decision

Careers are shaped by decisions. But some decisions have more than one perfectly reasonable answer. An ethics expert has advice on making management choices you can live - and succeed - with

By Joseph Badaracco and David Rosenbaum

Sometimes there can be more than one right answer to a problem. The option you choose can say a lot about the values of your company and your leadership. Making these "right vs right" choices can be one of the hardest tasks any manager can perform. But Joseph Badaracco, the John Shad Professor of Business Ethics at Harvard Business School, says there are some simple methods you can apply to help you answer these tough questions. Following his advice may not make the decisions any easier, but it should at least help you understand - and explain - why you make the choices you do.

David Rosenbaum
Professor Badaracco, could you briefly state the four questions that you should ask yourself when you're addressing a problem?

Joseph Badaracco: Yes. There are situations that I call "right vs right" problems. So you've got two responsibilities, and you've got to make good on both of them. And the four questions I think that will really help people cut to the fundamentals are these:

1. What are the consequences of different ways of dealing with the problem for everybody who's going to be affected by it?

2. Which individuals and which groups involved in the situation have rights that you've really got to respect? People may have a right to be told the truth. Shareholders have a right to good returns, and so forth. Everybody's got an obligation to obey the law, and people have a right to expect corporate officers to do so.

3. The third question is about the messages you want to send about your values as a leader, and about the values of your organization. Often in these tough "right vs right" conflicts, people are really watching closely, and you're sending messages about your character and the character of the kind of organization you're trying to create.

4. And the final question is what's going to work. It's Machiavelli's question. You've got to be practical. You can't simply tote up consequences, and dwell on rights, and think about your character. You need something that's going to actually make a difference, and so you've got to think about that question in conjunction with the other four.

Rosenbaum:
Now, what happens if you think only of consequences, and not rights? Where does that lead you?

Badaracco:It leads you into trouble. As I mentioned previously, there are a lot of different groups who believe that they have the right to have corporate officers and companies obey the law. There are the vast majority of most people in most organizations who believe they have the right to be treated fairly and honestly by the people they're working for. And there are the owners of a business, who have a right to stable, growing, risk-adjusted, legal returns.

If you drop any of these balls, you're going to pay for it, either inside the organization, outside with shareholders or outside with regulators.

Rosenbaum:
Now, conversely, if you think only of these rights - these many competing rights - and not the consequences, what road does that lead you down?

Badaracco:I think that leads ultimately to paralysis, and that's why you've got to balance your thinking about rights with thinking about consequences, thinking about values and character and thinking about what's actually going to work. It's very hard, ultimately, to wrestle some of these rights issues to the ground. By the time legal counsel has finished exploring and vetting all the rights-based issues, it may be two or three weeks after a decision needs to be made.

You need leaders in organizations - you need, actually, managers at all levels - who have sensitivity to the really important rights that they've got to pay attention to. They've got to take those into account in the plans that they make, but they've got to move on and think about the other considerations as well.

Rosenbaum:
And, just for balance, if you think only of your character?

Badaracco:Well, with all due respect to people reading this: Who put the Good Housekeeping seal of approval on your character, your judgement, your instincts? So that what you think is right - even if you deeply feel it's right - ought to trump consequences for other people, and the rights that other people have. The best leaders, when they have time, think hard about what they care about, what they value, but they've got a good team around them, and they've got some counsellors who may not be part of their management team.
They try to get the sense of others about what's the right thing to do, rather than just assume that their ethics [and] instincts show them the right path.

Rosenbaum:
And I guess it goes without saying that if you only think about what works in the real world, you get Enron, you get Mr Fastow, Mr Skilling and Mr Lay.

Badaracco:That's right. You become a plumber, a technician, somebody who's got a toolkit and can go around and work on problems. But the real risk is that if you're under a lot of pressure, and a situation is ambiguous, and you look for something that's going to work, you're going to end up finding something that'll work short term, maximizing some single metric, keeping you off the hot seat, and in many cases, not addressing the full complexity of the problem.

You may look like you handled the problem for a day, but there's a good chance it's going to come back and bite you and others later on!

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